1.0 MACRO ENVIRONMENT ELEMENTS
There are many factors in the macro-environment that will effect the decisions of the managers of any organization. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change.
1.1 Political and Legislation Factors
The political-legal dimension of the general environment also affects business activity. The philosophy of the political parties in power influences business practices. The legal environment serves to define what organizations can and cannot do at a particular point in time. Figures 1.1 shows the political and legislative segment of macro environment.
Figures 1.1: The political and legislative segment of macro environment
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Technological changes may create new opportunities for the firm, or threaten the survival of a product, firm, or industry. Technological innovation continues to move at an increasingly rapid rate. Technological change takes two forms:
• Pure invention
• Process innovation
Technology is a major macro-environmental variable which has influenced the development of many of the products we take for granted today, for example, television, calculators, video recorders and desk-top computers. Marketing firms themselves play a part in technological progress, many having their own research department or sponsoring research through universities and other institutions, thus playing a part in innovating new developments and new applications.
a) Pure invention
Pure invention refers to the creation of something new that is different from existing technology or products. For this reason, invention usually has economic value and has no competitors at initial stages and is often a monopoly by the individual who has the legal right on that invention. But there are disadvantages with inventions because there is no market at the early stage. New inventions can create new markets and opportunities for business, for example, the invention of semiconductors that created business opportunities in computers. b) Process innovation
Process innovation refers to the small changes in design, product formulation and manufacturing,
Political: this inturns the legislation and government rules of the country that may influence and pose as a threat to the business,
1. Macro environment analysis: the major externals which affect company’s decision making, marketing strategy and performance. It includes:
1. If an economy produces final output worth $5 trillion, then the amount of gross
Macro environment or macro forces consists of the larger societal factors that have the potential to affect an organization’s strategies. According to Phillip Kotler, these variables include demographic, economic, natural, technological, political, and cultural outside forces. (“Josbd”, n.d, para. 7)
Macro environment are the external and uncontrollable factors that influence an organization’s decision making and affects its performance and strategies.
Technology can greatly improve the industry through new ways of producing its products. The use of an innovative technology can improve the overall efficiency of the industry which can dramatically improve the supply of its finished goods. New technology may also be a source of competitive advantage as advanced technologies may minimize production costs which will translate to competitive prices.
Technological Forces — probably the most rapidly changing environmental force for all industries. How important is technology in your career choice? Do you have the most current technical skills that employers in your career field are seeking? Do the companies you are targeting have the resources to stay technologically competitive? How can you continually improve your technological skills to both avoid being replaced as well as keep your skills as marketable as possible?
Technological change is a fundamental driver of economic development and performance, not only at the level of firms and industries but also economies. Innovation is the organizational process through which new
The macrosystem phenomena refers to the culture in which we live and its effect on our values and beliefs. Stewardship and Community are important Hallmarks within the macrosystem as they refer to the preservation and respect for the natural environment and the importance of coming together on a local and global scale to practice responsible living. During my lifetime, and within my macrosystem, there has always been great emphasis placed on the preservation of our natural environment and the responsible use of its resources. It has become a social norm to consider the effects of our actions pertaining to our environmental surroundings and make necessary modifications to reduce the negative impact these actions have on our world.
There are many factors that will affect the decisions of the managers of any organization. Even The Coca-Cola Company, the worlds? largest beverage company has to consider about their macro environment as well as
Secondly is the technical or technological changes. The research and development done in the field of technology has had a big effect on the way manufacturing is done.
Political environment – The processes of national, regional and local governments, as well as various power groups that can affect the rules for doing business. This can include government intervention in particular industries, tax policies at all levels, government expenditures for certain causes, legislation aimed at implementing social policy, and regulation of various industries and trade practices.
In today's world, no business operates in isolation without interacting with the environment where it operates. Irrespective of the nature of business whether public or private organization; manufacturing; service industry; local or international firm, its operations are inhibited by the environment in which it operates.
Macro environment consist of those major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies.
An organization is an open system; therefore it interacts with its environment. To manage the relationship with the environment, a large part of strategic planning is concerned. The environmental factors can be divided to 2 main categories, which is MACRO and MICRO .Macro environmental factors seriously affect an organization business practice, profitability and future progress. It can